A valid explanation for real wage growth is

  • A an increase in the rate of productivity
  • B the rising cost of capital accumulation
  • C a contraction of emploment in service industries
  • D an increase in the quantity of labour
jamb 2013economics

The correct answer is A. an increase in the rate of productivity

Real wage growth is largely due to increased in economic activity creating competition between businesses to attract and retain workers. The higher the rate of economic activities (production, buying and selling) in the economy, the higher the real wage growth.

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